Consumer Finance Litigation

The U.S. Court of Appeals for the Sixth Circuit recently addressed both the timing and scope of "prior express consent" under the Telephone Consumer Protection Act ("TCPA"). The plaintiff in Stephen M. Hill v. Homeward Residential, Inc., - F.3d- , No. 14-4168 (6^th Cir. Aug. 21, 2015) alleged that his mortgage lender violated the TCPA by calling his cell phone using an autodialer in an attempt to contact him related to a mortgage debt he owed. The plaintiff did not provide his cell phone number when the mortgage was originated, but provided it three years later by contacting the mortgage lender to advise that his primary number was now his cell phone number. Subsequently, the plaintiff also listed his cell phone number on a modification agreement, on loss mitigation forms, and on a written consent form. The district court denied both parties' summary judgment motions, determining genuine issues of material fact existed regarding whether the defendant called with an autodialer and whether the plaintiff offered his cell phone number to the defendant. The jury rendered a verdict for the defendant after a one-day trial. The plaintiff appealed and took issue with the jury instruction on "prior express consent," among other things. The Sixth Circuit determined the following jury instruction was proper: "Prior express consent" means that before Defendant made a call to Plaintiff's cellular telephone number, Plaintiff had given an invitation or permission to receive calls to that number. Autodialed and prerecorded message calls to wireless numbers that are provided by the called party to a creditor in connection with an existing debt are permissible as calls made with the "prior express consent" of the called party. The Sixth Circuit held that a person gives his or her "prior express consent" to be called on a cell phone if he or she "gives his [or her] creditor his [or her] cellphone number in connection with a debt he [or she] owes." The court explained that consent can be given at any time as long as the person gives the company his or her number before the company calls that person. Therefore, a debtor can give consent at any point in a transaction, as a party gives consent when "he gives his number 'in connection with' that debt including after his initial signing of the loan." Although the FCC has not explicitly addressed this issue, other courts have previously issued opinions consistent with the Sixth Circuit's interpretation. See Moore v. Firstsource Advantage, LLC, No. 07-CV-770, 2011 WL 4345703, at 10 (W.D.N.Y. Sept. 15, 2011). The Sixth Circuit also explained that when a person provides their cell phone number to a company in connection with a debt, the result is a broad consent under the TCPA. The court stated that a debtor need not specifically consent to automated calls because a debtor's "general consent to being called on a cellphone constitutes 'prior express consent.'" The court explained that the FCC regulations for telemarketers, requiring a called party to consent in writing to being called by an autodialer, do not apply in the debtor-creditor context. It is worth noting that in his concurring opinion, Judge Clay agreed that a debtor need not provide consent to autodialed calls specifically, but expressed doubts as to whether the FCC correctly interpreted the statute and legislative intent in promulgating its regulations. Judge Clay stated that a challenge to the FCC regulation would have to come in a future case because the plaintiff did not raise that issue.